Finance
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- October 2024
- Case
Citizens of the World: The International Legacy of Gloria von Thurn und Taxis
By: Lauren Cohen, Maximillian Form and Sophia PanWhen her husband passed away and inheritance taxes struck, Princess Gloria von Thurn und Taxis took decisive action to preserve her family’s fortune and legacy. The Thurn und Taxis family, one of Europe’s oldest aristocratic dynasties, had built their wealth through the founding of the European postal system. Yet, most of their assets were tied up in illiquid holdings such as real estate and vast forest lands, with palace upkeep and cultural heritage costs presenting further challenges. Gloria deeply respected her German roots but considered the possibility of an international image to extend her family’s influence and legacy. The postal business had once given the family global prominence during the Holy Roman Empire —perhaps this same outward-looking spirit could now help Gloria safeguard the Thurn und Taxis name in the modern era. Could she re-establish her legacy beyond one that was confined to a singular country and, in effect, “re internationalize” the House of Thurn und Taxis? What was the risk for Gloria of trying to internationalize too extensively? And the risk of not doing so?
- October 2024
- Case
Citizens of the World: The International Legacy of Gloria von Thurn und Taxis
By: Lauren Cohen, Maximillian Form and Sophia PanWhen her husband passed away and inheritance taxes struck, Princess Gloria von Thurn und Taxis took decisive action to preserve her family’s fortune and legacy. The Thurn und Taxis family, one of Europe’s oldest aristocratic dynasties, had built their wealth through the founding of the European postal system. Yet, most of their assets were tied up...
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- 2024
- Working Paper
Ponzi Funds
By: Philippe van der Beck, Jean-Philippe Bouchaud and Dario VillamainaMany active funds hold concentrated portfolios. Flow-driven trading causes price pressure, which pushes up the funds’ existing positions resulting in realized returns. We decompose fund returns into a price pressure (self-inflated) and a fundamental component and show that when allocating capital across funds, investors are unable to identify whether realized returns are self-inflated or fundamental. Because investors chase self-inflated fund returns at a high frequency, even shortlived impact meaningfully affects fund flows at longer time scales. The combination of price impact and return chasing causes an endogenous feedback loop and a reallocation of wealth to early fund investors, which unravels once the price pressure reverts. We find that flows chasing self-inflated returns predict bubbles in ETFs and their subsequent crashes, and lead to a daily wealth reallocation of $500 Million from ETFs alone. We provide a simple regulatory reporting measure – fund illiquidity – which captures a fund’s potential for self-inflated returns.
- 2024
- Working Paper
Ponzi Funds
By: Philippe van der Beck, Jean-Philippe Bouchaud and Dario VillamainaMany active funds hold concentrated portfolios. Flow-driven trading causes price pressure, which pushes up the funds’ existing positions resulting in realized returns. We decompose fund returns into a price pressure (self-inflated) and a fundamental component and show that when allocating capital across funds, investors are unable to identify...
About the Unit
Our strategy is to assemble and nurture a faculty whose interests and skills complement each other, and who work well together:
a) to produce a broad range of finance-related research that is published in top-tier scientific and practitioner journals, and that addresses issues of present and future importance to managers (including regulators and policy makers);
b) to develop highly-relevant and intellectually rigorous MBA and executive education courses; and
c) to mentor future academics through the Business Economics doctoral program.
Our applied focus and access to business organizations are major advantages which are reinforced by our students and our case-based approach. We have a faculty with broad expertise, and we have resources, field contacts, and institutional support, all of which we can leverage to do richer work and be more productive than we could at other institutions.
Recent Publications
PE Secondaries: Blackstone Strategic Partners
- October 2024 |
- Supplement |
- Faculty Research
Viking Global Investors: Public Heritage, Private Opportunities
- October 2024 |
- Supplement |
- Faculty Research
Citizens of the World: The International Legacy of Gloria von Thurn und Taxis
- October 2024 |
- Case |
- Faculty Research
Continuation Fund Dilemma
- October 2024 |
- Case |
- Faculty Research
Partners Capital: Evaluating Fund Performance
- October 2024 |
- Supplement |
- Faculty Research
Ponzi Funds
- 2024 |
- Working Paper |
- Faculty Research
Should a Family Business Accept a Returning Daughter’s Radical Proposal?
- September–October 2024 |
- Article |
- Harvard Business Review
LFM Capital: Turnaround at Pratt Industries (B)
- October 2024 |
- Supplement |
- Faculty Research